To all of the mortgage lenders managing your own appraisal panel (or considering managing your own panel), this post is for you. Here at Reggora, we work with many lenders who choose to manage their own panel, either in place of, or in addition to, working with appraisal management companies (AMCs).
While managing your own panel of appraisers has its benefits, such as maximizing the control and flexibility for your appraisal operations, it also comes with a number of challenges. In this post, I’ve outlined five best practices for best results when managing your own panel of appraisers.
If you'd like to dig into this topic a little deeper, check out our webinar on appraiser panel management best practices or click the image below to download our guide outlining the seven best practices for panel management.
#1: Maintain pipeline visibility
Keeping track of all your orders is a principal challenge of anyone managing a large volume of appraisals. There are a few important things to track when looking at your pipeline:
- How many orders are in my pipeline?
- How many are awaiting inspection?
- How many have been inspected?
- How many require my attention?
- When did we place the order?
- When are the close dates of my orders?
- Have the close dates moved? (and does the appraisal vendor know?)
If you can answer all of the above questions with confidence, you’ll be in a great position to resolve issues or address complications before they cause delays. Whether it’s building out internal reporting tools, referring to your LOS, or using a dedicated appraisal management software, staying on top of your pipeline will help turn times stay on track and reduce stress on your team.
#2: Allocate orders efficiently
There are a few key things to keep in mind when allocating your orders to a panel of appraisers.
Keep track of your appraisers and the work that they accept versus the work they turn down. If your appraisers are turning down more work than they’re accepting, it could be indicative that the property location is too far from their location. Based on what you learn, you may want to revisit your coverage area definitions.
While the most common way coverage areas are defined is by county, this level of granularity is simply not sufficient to promote efficient order allocation. Take San Bernardino County in Southern California for example. This county covers over 20,000 square miles, contains over two million people, and is nearly four times the size of the state of Connecticut. While this county is an outlier in terms of size, there are over 60 counties in the United States that cover more than 5,000 square miles (about the size of Connecticut).
After considering the vast size of many counties in the U.S., it becomes clear that if an appraiser is completing an order on one side of the county in the morning, and has to drive dozens of miles to get to the next inspection, he or she will be far less likely to accept that order due to the lengthy commute.
If lenders can narrow coverage areas down to the zip code level, sending orders to appraisers based on more tightly defined proximity rules to eliminate lengthy travel times, they will find far fewer orders being declined.
#3: Track appraisal vendor performance
Just as you can optimize your allocation of orders around proximity to the inspection address, the same can be said for the allocation of different products to different vendors based on performance. If you know certain appraisal vendors can complete certain products with quicker turn times or higher quality, be sure to reward those performers with more work.
In this process, data is key, which is easily available thanks to our partnership with GoodData. Ensure you are able to have measurement points throughout the process for each appraisal vendor you use. Track revisions and corrections, timeliness, and multiple submissions to gain a picture of your top performers, and those who are underperforming.
If you use an appraisal management software, ensure the ability to track appraisal vendor performance across many different metrics is easily accessible and digestible, as these data points are key in alerting you of potential problem areas before they rear their heads.
As you’re tracking performance, be sure to reward your best performers with more work. For appraisers who are not meeting standards, either empower them with tools to succeed or remove them from your panel. This point was articulated clearly by Assurance Financial Chief Digital Officer Katherine Campbell during a webinar on the digital mortgage.
#4: Maintain clear lines of communication
When managing your own panel of appraisers, keeping up your relationships with each appraiser or appraisal vendor is key to successful appraisal operations. Communicate consistently and clearly with your panel, and set expectations around the amount of work each appraiser can expect to receive, as well as setting guidelines for the level of quality you expect.
If you use an appraisal management software, ensure it provides clear and compliant communications with your appraisers, and notifies them automatically of incoming orders, changing dates, payment information, etc.
If you as a mortgage lender are able to build trust and strong relationships with your appraisers by paying competitive fees, providing consistent work within their coverage area, and keeping them informed on their orders, they’ll be more likely to bump your orders to the top of their queue at busy times. Simply freeing up lines of communication helped North Easton Savings Bank reduce turn times by 35% during a high-volume time.
#5: Manage all things compliance
Managing your own appraisal panel means that you’re responsible for adhering to compliance standards. If you're implementing an appraisal management software, make sure that it includes features to help you maintain compliance. If you’re not using an appraisal management system, you’ll likely need a team of people dedicated to providing assurance that the appraiser selection process is compliant and operating within applicable regulations and policies.
For example, by regulation and most policies governing a lender’s appraisal process, anyone performing appraisal management services such as selecting an appraiser or an Appraisal Management Company for a particular assignment, is required to be independent of the transaction. Ensuring this and other compliance standards are met can be challenging without a software or system in place to reduce or eliminate the potential for human error.
How Reggora can help manage your panel of appraisers
If all of these things sound like a lot to manage, we’re here to help. Reggora provides mortgage lenders with appraisal management software that makes all of the above easy and seamless. From pipeline visibility to appraiser performance reporting and compliance, we have you covered. Click here to download our guide and learn more about how Reggora helps you manage your own panel of appraisers. Or if you want see the platform in action, request a demo and see for yourself!
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